Plesner wins landmark case regarding expropriation on behalf of TDC NET

Case News
Plesner has successfully represented TDC NET in a landmark case before the Eastern High Court concerning an order issued by the Danish Centre for Cyber Security ("CFCS"), now the Danish Resilience Agency. The High Court held that, although the order requiring TDC NET to replace Huawei equipment was lawful, it constituted expropriation under Section 73 of the Danish Constitution. As a result, the State must pay TDC NET compensation of DKK 80 million.

The case arose from a 2023 decision by CFCS, which ordered TDC NET to replace its Huawei DWDM-network based on (alleged) national security grounds under the Danish Telecommunications Security Act. TDC NET challenged both the legality of the order and argued that, regardless of its legality, the measure constituted expropriation requiring full compensation under Section 73 of the Danish Constitution.

The High Court found that CFCS had acted within its statutory powers and that the order was lawful. However, the Court also concluded that the measure amounted to expropriation. In reaching this conclusion, the High Court attached particular importance to the exceptional intensity of the intervention, which required TDC NET to replace its entire DWDM-network, resulting in significant operational and financial consequences. The Court further emphasised that the measure was highly specific in nature, effectively targeting TDC NET alone, and that it deprived the company of its existing rights to use lawfully acquired equipment and continue its established supplier relationship with Huawei.

The High Court therefore held that the conditions for expropriation under Section 73 of the Danish Constitution had been met and that TDC NET was entitled to compensation. The damages were awarded in the amount of DKK 80 million based on the High Court's assessment. The High Court reduced the amount to DKK 80 million primarily on the grounds that, in the Court's view, the calculation of the loss was subject to uncertainty.

The judgment is of considerable precedential importance, confirming that even regulatory measures adopted in the interests of national security may constitute expropriation where they impose an exceptionally intensive and targeted burden on an individual undertaking.

As the case raises fundamental constitutional questions, it was heard by the High Court as the court of first instance. The judgment may be appealed to the Supreme Court.

Plesner represented TDC in the High Court.

 

Related news

See all